Correlation Between PM Capital and Mad Paws
Can any of the company-specific risk be diversified away by investing in both PM Capital and Mad Paws at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PM Capital and Mad Paws into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PM Capital Global and Mad Paws Holdings, you can compare the effects of market volatilities on PM Capital and Mad Paws and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in PM Capital with a short position of Mad Paws. Check out your portfolio center. Please also check ongoing floating volatility patterns of PM Capital and Mad Paws.
Diversification Opportunities for PM Capital and Mad Paws
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between PGF and Mad is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding PM Capital Global and Mad Paws Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mad Paws Holdings and PM Capital is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on PM Capital Global are associated (or correlated) with Mad Paws. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mad Paws Holdings has no effect on the direction of PM Capital i.e., PM Capital and Mad Paws go up and down completely randomly.
Pair Corralation between PM Capital and Mad Paws
Assuming the 90 days trading horizon PM Capital Global is expected to generate 0.27 times more return on investment than Mad Paws. However, PM Capital Global is 3.66 times less risky than Mad Paws. It trades about 0.1 of its potential returns per unit of risk. Mad Paws Holdings is currently generating about 0.0 per unit of risk. If you would invest 171.00 in PM Capital Global on September 2, 2024 and sell it today you would earn a total of 57.00 from holding PM Capital Global or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PM Capital Global vs. Mad Paws Holdings
Performance |
| Timeline |
| PM Capital Global |
| Mad Paws Holdings |
PM Capital and Mad Paws Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PM Capital and Mad Paws
The main advantage of trading using opposite PM Capital and Mad Paws positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PM Capital position performs unexpectedly, Mad Paws can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mad Paws will offset losses from the drop in Mad Paws' long position.| PM Capital vs. WA1 Resources | PM Capital vs. Predictive Discovery | PM Capital vs. Cooper Metals | PM Capital vs. OD6 Metals |
| Mad Paws vs. Inventis | Mad Paws vs. Pengana Private Equity | Mad Paws vs. PM Capital Global | Mad Paws vs. Macquarie Group Ltd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |